You are downsampling from 3006x2308 to 128x128 (the U and V values). And that is then applied to your surface. The squares you see are pretty much the pixels of the resulting texture. You should use much higher values. Probably 3006x2308 with a bigger blur radius.
Here a version with U 3006, V 2308 and blur radius 0.1
And for fun a quick render in the Raytraced viewport mode of Rhino 6 with Afrikan polished teak material applied:
